13. Swaptions

Frugal Finance offers online courses covering various aspects of financial derivatives. These courses provide detailed details into different types of derivatives and their uses in risk management and financial tactics.

Credit Swaps

This course examines credit swaps, which are used to transfer credit risk between parties. It covers different forms of credit swaps such as credit default swaps and total return swaps, emphasizing their role in managing credit exposure.

Swaptions

The Swaptions course gives an overview of options associated with swaps. It explains the two types of swaptions – receiver and payer swaptions – and how they work in both American and European contexts.

Corporate Application of Swaptions

This course focuses on how firms can use swaptions to manage risks associated with callable bonds. It discusses the speculative and hedging opportunities swaptions offer to firms in financial risk management.

Extendable and Cancelable Swaps

This course looks into complex financial instruments that combine features of plain vanilla swaps with swaptions. It explains how parties can modify or terminate swap agreements using extendable and cancelable swaps.

Swaption Pricing and Applications

This course covers the pricing and uses of swaptions, emphasizing their use in financial risk management. It explains the pricing methodology using the Black options model and the decision-making process upon swaption expiration.

Swaption Valuation at Expiration

This section focuses on valuing swaptions at their expiration, explaining the benefits for both payer and receiver swaptions and the valuation methodologies involved.

Swaption Valuation Before Expiration

This course discusses the valuation of swaptions before their expiration, treating them as portfolios of calls or puts on SOFR. It uses the Black model for valuing these options and provides equations for calculating their values.

Swaption Pricing Example

This course provides an all-inclusive example of swaption pricing, illustrating the calculations involved using the Black model and expressing costs in terms of basis points of the notional principal.

Swaption Application

This course looks at the use of swaptions in the context of interest rate swaps, underscoring the flexibility they offer in modifying swap agreements and the tactical decision-making involved.

Overall, Frugal Finance courses offer detailed explanations of derivatives and their real-world uses in financial markets, providing valuable details for professionals and students in the field of finance.